Business Scaling

Why Startups, SMEs Outsource Software Product Development

Why Startups, SMEs Outsource Software Product Development

Imagine this: You have a brilliant business idea, a solid plan, and unwavering dedication to succeed. But you can't take that crucial step forward because you lack the necessary team members to get things off the ground. It's a situation many entrepreneurs know all too well, which can spell doom for their businesses.

That's why so many startups and small to medium-sized enterprises (SMEs) turn to outsourcing. Research shows that approximately 37% of small businesses outsource at least one business function, and that number is likely to grow.

So, why are these businesses leaning into outsourcing for product development? We're here to shed light on this trend. With over a decade of expertise in staffing, we'll offer you a deep dive into the reasons behind the buzz. 

Ready to dive in? Let's get started...

What Is Outsourced Software Product Development?

The software development market is enormous. Statista estimates it’s expected to reach $858 million by 2028. Moreover, the number of software developers worldwide is increasing. Right now, there’s about 27.7 million worldwide

Software development outsourcing is hiring a team of experts from another company to build a custom software product for you. You can partner with a specialized software development company to bring your idea to life.

Why Should You Outsource Software Development?

Starting a new business is an exciting journey, but developing software can be costly and run your your capital dry. 

Rather than spending time and resources building an in-house software development team, startups can save a lot of money by outsourcing it. This is why it’s a smart move for startups like yours.

Consider this: developing a software product alone can cost $5,000 and above

Gain access to superior tech talent worldwide

Outsourcing gives you access to a global talent pool. You're not limited to hiring talent only from your local area. This means you can find the best developers, designers, and QA testers worldwide. 

For instance, you can hire a top-notch developer in the Philippines while saving up to 80% on labor costs. This diversity in talent allows you to build a team that perfectly matches your project's needs.

Meet qualified candidates with reasonable salary ranges 

Outsourcing balances quality and cost. In countries with lower living costs, like the Philippines, you can get high-quality software development services at a fraction of the cost you'd incur by hiring a local team.

This cost-efficiency can allow your small business to allocate resources to other critical aspects, such as marketing or product development.

Build a cross-functional team faster

Building a cross-functional team in-house can be time-consuming. Outsourcing allows you to assemble a team with various skills quickly. 

For example, you can have developers, designers, and QA testers working together seamlessly on your project. This speed can give your startup a competitive advantage by getting your product to market faster.

Say goodbye to micromanagement

Outsourcing firms are experts in managing projects efficiently. They have established workflows and processes, reducing the need for you to micromanage every aspect of development. This frees up your time and energy to focus on the bigger picture – growing your startup and refining your product strategy.

Besides, did you know that long-term micromanagement can result in low employee morale, high staff turnover rate, reduction of productivity, and patient dissatisfaction? It also leads to decreased growth potential in teams.

Maintain effective communication within the team

Outsourcing companies use productivity tools and methodologies to ensure everyone on the team is on the same page. 

For example, they may use project management tools like Trello or Slack for real-time updates and discussions. This transparent communication fosters collaboration and ensures your project progresses smoothly.

Adapt Agile methodology best practices

Agile development divides the project into small, manageable sprints, allowing you to see progress regularly and adjust as needed. Research by CA Technologies found that team members who are 95% dedicated to an agile team have their productivity doubled. 

Many outsourcing companies follow the agile methodology, emphasizing flexibility and customer feedback. And while it is easy to learn, it is challenging to master. So, instead of spending more time perfecting it, let your outsourced partner handle your project and adapt to changing requirements and market conditions. 

Flexibility and scalability opportunities

Startups often experience rapid growth, and outsourcing can accommodate that growth. You can easily scale up or down the team size based on your project's needs.

Whether you need to add more developers to meet a tight deadline or reduce the team during quieter periods, outsourcing provides the required flexibility.

Outsourcing software development for your startup offers numerous benefits. By leveraging these advantages, you can focus on innovation and growth while leaving the technical complexities to the experts.

Types of Product Development Services To Outsource for Your Business

Achieving your goals often requires more than just a great idea. It takes efficient and effective product development services to realize your vision. Here are the different types of product development services and why you should outsource them:

Discovery phase or MVP stage

The discovery phase or MVP (Minimum Viable Product) stage is like the blueprint of your project. It's the initial step where you define your project's scope, goals, and features. Think of it as laying the foundation for a house.

Why outsource it?

Outsourcing this phase can save you time and money, as the average cost can range from $5,000 to $20,000. With the help of experienced professionals, identify potential roadblocks and make necessary adjustments early, preventing costly mistakes. 

For example, a software development company can help you create a simple version of your app to test the market before building the full version.

Product development management and tech strategy

Product development management involves overseeing the entire development process, ensuring everything stays on track. Tech strategy, on the other hand, focuses on selecting the right technologies and tools for your project.

Why outsource it?

Outsourcing these roles ensures that your project stays organized and technologically sound. 

Imagine a project manager as the captain of a ship, steering it through rough waters. By outsourcing, you can benefit from their expertise without hiring, training, and managing an in-house team. Besides, despite the big tech layoffs and hiring freezes, the demand for tech talent will only grow. There will be a shortage of over 85 million tech workers by 2030. And you don’t want to get caught up in that! 

UI/UX design

UI (User Interface) and UX (User Experience) design focus on creating a user-friendly and visually appealing product. It's all about making your product easy to use and enjoyable for your customers.

Why outsource it?

Outsourcing UI/UX design guarantees a professional look and feel for your product. A good design can attract more users and keep them engaged. 

For instance, a design agency can create a sleek, user-friendly website that enhances your brand's image.


Coding is where the actual development work happens. It's the process of turning the design and concept into a functional product, like building the rooms of a house after the foundation is laid.

Why outsource it?

Outsourcing coding ensures you have access to skilled developers who specialize in your project's technology stack. This can lead to faster development and fewer bugs. 

Quality assurance (QA) and testing

QA and testing are essential to ensure your product works correctly. It's like inspecting every corner of your house to ensure it's safe and functional.

Why outsource it?

Outsourcing QA and Testing means experts thoroughly test your product for bugs and issues. This can save you from customer complaints and costly recalls. 

Outsourcing these product development services can be strategic in achieving your goals. It allows you to tap into specialized expertise and resources, ultimately helping you gain success more efficiently and cost-effectively.

Outsourcing vs. Remote Staffing: Which Is More Beneficial For You?

Are you wondering whether to outsource software development or tap a remote staffing company to help you hire a development team? It's a common dilemma many businesses face. Moreover, each approach has advantages and considerations that you must evaluate carefully.

Outsourcing companies


  • Cost-efficiency: Outsourcing can be more cost-effective because you don't have to worry about hiring and training employees or maintaining office space.
  • Expertise: You gain access to a pool of experienced professionals and specialized skills. Outsourcing firms often have experts in various technologies.
  • Faster time to market: External teams can start working on your project quickly, reducing time-to-market and giving you a competitive edge.
  • Scalability: Easily scale your project up or down as needed without the hassle of hiring or laying off employees.


  • Communication challenges: Differences in time zones and language barriers can lead to miscommunication. You may need to invest extra effort in managing the collaboration.
  • Limited control: You have less direct control over the development process and may need to trust the outsourcing partner's management.
  • Data security: Sharing sensitive data with a third party may raise concerns about data security and confidentiality.

Remote staffing company


  • Full control: With an in-house remote team, you have direct control over the development process, priorities, and workflow.
  • Better collaboration: Your remote team is integrated into your existing team seamlessly, ensuring better communication and collaboration. 
  • Long-term investment: Developing an in-house team can be a long-term investment as your employees gain a deep understanding of your business and its needs.
  • Security: You have better control over data security since you manage the infrastructure.


  • Recruitment challenges: Finding the right talent and expertise can be challenging, and your team may lack specialized skills. 

    Pro-tip: But as long as you have teamed up with a remote staffing company with a network of potential candidates, such as MultiplyMii, you won’t have to worry about it.

  • Slower start: Recruiting and onboarding your ideal team members may take time. 

    Pro-tip: Plan your project carefully. Aside from connecting you with skilled remote tech talent, MultiplyMii has a 60-day replacement guarantee (for cases where you are unsatisfied with your hire).
  • Slightly higher cost: Providing necessary tools and managing remote staff may require additional resources but not as much as hiring a local team. You only need to invest in the best remote management tools.

What's more beneficial for you?

The choice between outsourcing and remote staffing depends on your needs and resources. Here are some factors to consider:

  • Budget: If you have limited funds, outsourcing might be more cost-effective initially.
  • Project complexity: Outsourcing and remote staffing can provide access to expertise for complex projects requiring specialized skills.
  • Long-term vs. short-term: Outsourcing can be more advantageous if you need flexibility for short-term projects. Hiring a remote development team may be a better investment for long-term projects.
  • Control vs. speed: A remote team might be the way to go if you prioritize control and can afford a longer development cycle. For rapid development and quick launches, outsourcing can be more expedient.
  • Data sensitivity: Consider the sensitivity of your project's data. If it's highly confidential, you might lean towards remote staffing for better security.

Whichever path you choose, remember that successful software development requires clear communication, effective project management, and a focus on quality. It's all about finding the best fit for your needs and goals.

Save on Costs While Growing Your Development Team

Do you agree that finding the right talent at the right cost is crucial for sustainable growth?

At MultiplyMii, we understand these challenges and are committed to helping your business thrive.

Our remote staffing solutions offer businesses a cost-effective way to expand their teams without compromising quality.

By partnering with us, you save on costs while securing Filipino tech talent to drive your projects forward.

Join the community of successful businesses that have benefited from our services.

Book a discovery call today, and let us empower you to succeed.

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